I'm director of the Reynolds Center for Business Journalism at the Cronkite School at Arizona State. I'm also author of the Forbes eBook Curbing Cars: America's Independence From The Auto Industry. I was Detroit bureau chief for the New York Times, and led Changing Gears, a public media project that studied the industrial Midwest. E: vmaynard@umich.edu T @mickimaynard @curbingcars

GM officials said they would have more details on European restructuring moves in March. But fixing Europe isn’t a matter of closing plants — something GM actually can’t do under its current labor contracts. Instead, GM is going all over its operations, considering moves like combining back office operations of Opel and Vauxhall, its European brands, with Chevrolet in Europe.

If you consider that GM sold fewer than half a million cars in Europe during the fourth quarter, GM’s loss works out to about $1,400 per vehicle. And, it’s probably more than that on Opel produced automobiles, because some of GM’s sales in Europe are Chevrolets, which it ships in from other parts of the world.

No wonder someone at GM warned the results would be “horrendous” earlier this month. And things have deteriorated there fast: until November, GM was still saying Europe would break even in 2011.

Instead, GM said it lost $747 million in Europe last year, compared with a $1.93 billion loss for 2010. It is the 12th straight year in which its European operations have lost money.

The rotten news in Europe blemished GM’s fourth quarter results, which fell short of analysts’ expectations, and cast a big shadow over its $7.6 billion net income for 2011.

GM Europe’s sales last year were smaller than the 1.77 million vehicles sold by its Chevrolet division. And GM is losing share in Europe — its portion of the market dropped to 8.6 percent, versus 8.8 percent in 2010.

And over the past two years, GM has lost just under $3 billion in Europe, a drag on its newly successful operations in North America.

Some European numbers are moving in favorable directions for GM. Its European head count has dropped to 39,000 people, from 50,000. Its European sales for the year rose to 1.73 million (including just over half a million Chevrolets) compared with 1.66 million in 2010.

CEO Akerson was one of the board members who argued against the sale of GM Europe in 2009, when it had a buyer. But now, it’s up to vice chairman Steve Girsky, now chairman of Opel, to see if he can fix the place.

Whether GM sticks with Opel and Vauxhall, or eventually looks for another buyer, things are just going to get tougher from here. The company will have to keep expending energy on yet another restructuring before GM can declare itself completely healthy.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

There are a lot of troubling facts in this story, but I think the most shocking is this: “It is the 12th straight year in which its European operations have lost money.” How long can this be tolerated?

CEO Dan Akerson was among those who argued in favor of keeping GM Europe, even when GM had a buyer in Magna International. Now, it’s a point of personal pride for him to fix it. But, maybe this is just unfixable.

Magna owes Akerson a real debt of gratitude. Magna’s ego clashed with his and Magna “won” (or is it “lost” with these guys playing in the sandbox with our money; who knows?). And I bet he gets his bonus too.

But isn’t this a management problem? Opel has been an important source of product for GM. In 2009, they backed out of getting rid of Opel. They needed Opel then for product development. Has that changed? What would the consequences be of getting rid of Opel?

Could it be because Shareholders are NOT allowed to vote on Management issues in MOST Corporations in America? Maybe Corporations REALLY need to listen to the Shareholder…. DIRECTLY! One share….One VOTE.

However, RP … many shares are “owned” by Mutual Funds … and do you have any idea how few individuals would even have a clue/give a rip about how to vote a proxy? They claim investment is “too complicated” for them, so they turn it over to an investment firm … only reason they’re in the market is because they “believe” their 401K SAVINGS plan is an INVESTMENT plan … hard to save enough to offset the devaluation caused by Fed devaluation …

What do I see as the most dangerous and troubling aspect of this? GM continues to prove that it can’t manage its way out of financial difficulty and continues to make disastrous decisions for all the wrong (ego?) reasons. Twelve years and it backed away from a buyer. Combining back office operations? That should save one or two Billion a year.